Investing, Tax Planning

Can You Have Too Much of a Good Thing?

February 23, 2022

The Quest for Balance

The stock market was up nearly 27% last year,* a boon to many investors. But can it be possible to have too much of a good thing?

Your asset allocation is a key driver of long-term portfolio performance.

When we create your investment portfolio, we allocate your investments into diversified selections of equity, fixed income, and other asset classes to align with your investment timeframe, objectives, and feelings about risk. This ‘asset allocation’ aims to provide you with competitive, risk-adjusted returns that we believe are appropriate and sustainable based on your individual goals.

Over time, your allocation will naturally shift.

Each year, some of your investments perform better than others, which may cause your portfolio allocation to shift. Allocations may also shift based on our perception of the current relative attractiveness of each asset class.

Your Washington Trust team keeps you on track toward your goals.

At times, it may be best to temporarily have a bias or be in the upper range of your asset class target percentage. However, we regularly evaluate your allocation against your goals to make sure your portfolio remains consistent with your objectives. We consider a variety of factors when reviewing your asset allocation, including the tax consequences of selling high-performing assets and opportunities for reinvestment.

Please reach out to your Washington Trust Wealth Advisor if you have any questions about your investment portfolio, asset allocation, or would like to review your strategy for achieving long-term wealth goals. As your trusted advisors, we stand ready to serve all of your wealth management and planning needs.

* S&P 500 ends 2021 with a nearly 27% gain, but dips in final trading day, CNBC, 12/31/21

The views expressed here are those of Washington Trust Wealth Management and are subject to change based on market and other conditions. Investment recommendations and opinions expressed in these reports may change without prior notice. All material has been obtained from sources believed to be reliable, but its accuracy is not guaranteed.

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Any views or opinions expressed are those of Washington Trust Wealth Management. The information provided does not constitute legal, tax, or investment advice and it should not be relied on as such. It does not take into account any investor's particular investment objectives, strategies, tax status, or investment horizon. Please consult with a financial counselor, attorney, or tax professional regarding your specific investment, legal, or tax situation. It should not be considered a solicitation to buy or an offer to provide investment advisory or other services. All information is current as of the date of this material and may change at any time without prior notice. The information provided is solely for informational purposes and has been obtained from sources believed to be reliable but its accuracy is not guaranteed.